The defined contribution (DC) pensions market recorded a growth of 9.0%
in terms of new business premiums in 2010, expanding at 5.6% and 7.7%
respectively during 2011 and 2012. The growth was attributed to the
declining membership of private-sector occupational defined benefit (DB)
schemes, improving stock market returns and labor market conditions, as
well as a rise in the minimum pension age and the state pension age
(SPA).

New business premiums paid into individual and workplace pension DC
schemes declined by 11.7% in 2008, dropping further by 17.9% in 2009.
The recession severely damaged the ability of individuals to save for
retirement. Employers were further discouraged to make contributions on
behalf of their employees as they recorded a contraction in their
finances. High charges eroding the value of pension pots and low annuity
rates continued to serve as disincentives to save into a pension. The DC
pensions market remained resilient, however, posting a compound annual
growth rate (CAGR) of 0.45% during the review period (2008 and 2012).

The market faced opposing dynamics as individual personal pensions new
business declined at a CAGR of 6.1% between 2008 and 2012, whereas new
business premiums paid into workplace DC pensions schemes grew at a CAGR
of 7.7% over the same period. The growth in workplace pensions was
attributed to the increased popularity of group personal (or
contract-based) pensions (GPPs), far less onerous to run than
occupational (trust-based) schemes.

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